The India ethanol market has been witnessing steady growth over the past few years. Ethanol is produced by fermenting any biomass that contains 5–70% sugar or starch. The major feedstocks used in India for ethanol production include sugarcane molasses, B-heavy molasses, corn, and surfeit or damaged food grains like rice, wheat and broken rice. It is primarily used for alcoholic beverages and industrial applications such as manufacturing of chemicals, personal care products and pharmaceuticals. Ethanol blended petrol (EBP Programme) has also emerged as one of the most promising alternative green fuels. The Government of India has launched supportive schemes and policies such as the EBP Programme to promote the use of ethanol in automotive fuels. This aims to reduce dependence on imported oil and lower emissions.

The Global India Ethanol Market Size Is Estimated To Be Valued At US$ 2.43 Bn In 2024 And Is Expected To Exhibit A CAGR Of 15.% Over The Forecast Period 2024-2031.

Key Takeaways

Key players operating in the India ethanol market are Piccadily Sugar & Allied Industries Ltd., Thiru Arooran Sugars Ltd., Ugar Sugar Works Ltd., Dhampure Speciality Sugars Ltd., Praj Industries, Triveni Engineering & Industries Ltd, E.I.D. Parry (India) Ltd., DCM Shriram Ltd., Mawana Sugars Ltd., Uttam Sugar Mills Ltd., Kothari Sugars And Chemicals Ltd., Avadh Sugar & Energy Ltd., The Ugar Sugar Works Ltd., Dwarikesh Sugar Industries Ltd., K.M.Sugar Mills Ltd., Shree Renuka Sugars, Balrampur Chini Mills Ltd., Bajaj Hindusthan Sugar Ltd., Dalmia Bharat Sugar and Industries Ltd., Dhampur Sugar Mills Ltd. The Indian ethanol market is witnessing growing demand from the automotive fuel segment driven by the EBP Programme. To achieve 20% ethanol blending by 2025, the government has allowed setting up of new distilleries and expansion of existing ones resulting in global expansion of the market.

The growing automotive fleet and government initiatives to promote use of biofuels in vehicles are fueling demand for ethanol in India. Ethanol blending mandates and targets coupled with incentives for ethanol production are encouraging investments in distilleries. To reduce dependence on crude oil imports and lower emissions, the government has raised the ethanol blending target which is augmenting ethanol demand. This has made India one of the fastest growing markets for ethanol globally.

Market Drivers

One of the key drivers for India ethanol market is the government policy and initiatives to promote ethanol blending in petrol. The government has progressively increased the ethanol blending target from 5% initially to 10% in 2019-2020 and further to 20% by 2025 in a phased manner. Implementing the ethanol blending program or EBP at a national level will boost ethanol demand and provide an alternate sustainable fuel source. Financial incentives for sugar mills and distilleries have also supported ethanol production capacity additions. Rising crude oil prices and rising focus on reducing carbon emissions are catalyzing the shift towards alternate fuels like ethanol in the transportation sector.

Geopolitical Impact On India Ethanol Market Growth

The current geopolitical instability and ongoing tensions between key nations are impacting the growth of India's ethanol market. The Russia-Ukraine conflict has disrupted global supply chains and affected commodity prices worldwide. India imports around 20% of its total ethanol requirements. The spike in crude oil prices due to the war has made imported ethanol costlier for domestic ethanol blending programs. Rising inflation has also reduced disposable incomes and domestic fuel demand in India.

However, the government remains committed to its 20% ethanol blending targets by 2025. It is providing additional subsidies and incentives to boost domestic ethanol production capacities. Strategic partnerships between oil marketing companies and ethanol producers will help stabilize supply. Adopting advanced technologies like cellulosic ethanol can diversify feedstock sources and reduce geographic dependence. Focusing on second and third-generation biofuels can further insulate the industry from geopolitical risks. Long-term offtake agreements and developing surplus capacities will help sustain growth momentum in the coming years.

Geographical Regions With High Market Concentration

The states of Uttar Pradesh, Maharashtra, Karnataka, and Uttarakhand account for over 60% of the total India ethanol market value currently. This is due to favorable climatic conditions and higher sugarcane production in these regions. Uttar Pradesh alone contributes to about 30% of the country's total ethanol supply due to abundant feedstock availability and a large number of sugar mills. Maharashtra is the second largest producer, driven by established ethanol distillation capacities in the state.

Fastest Growing Region
The southern state of Telangana is emerging as one of the fastest growing regions for India's ethanol market over the next decade. The state government is promoting investments in new distilleries and offering financial benefits for sugarcane farmers. This is expected to triple the state's ethanol production capacity by 2027. Availability of alternate feedstocks like corn and completion of farm-to-fuel infrastructure are supporting industry growth. The presence of large oil companies and expansion plans of existing producers indicate continued momentum in the Telangana ethanol market.

What are the key data covered in this Global India Ethanol Market report?

:- Market CAGR throughout the predicted period

:- Comprehensive information on the aspects that will drive the Global India Ethanol Market's growth between 2024 and 2031.

:- Accurate calculation of the size of the Global India Ethanol Market and its contribution to the market, with emphasis on the parent market

:- Realistic forecasts of future trends and changes in consumer behavior

:- Global India Ethanol Market Industry Growth in North America, APAC, Europe, South America, the Middle East, and Africa

:- A complete examination of the market's competitive landscape, as well as extensive information on vendors

:- Detailed examination of the factors that will impede the expansion of Global India Ethanol Market vendors

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